BENGALURU: When Elon Musk, CEO of Tesla, simply wrote #Bitcoin on his Twitter bio on Friday, the cryptocurrency rose 14 percent to hit a two-week high of $ 36,901 (about 26.9 lakh). When the richest man in the world says it, people listen!
Musk’s 43.8 million followers, including many Indians, got caught up in a crypto frenzy and debated whether investments in digital currencies are back on track.
After rallying 300 percent last year when people compared Bitcoin to their traditional favorite gold, the value fell below $ 30,000 in January until Musk declared his love for crypto.
Last month, he even hinted at converting some of Tesla’s transactions into digital currency.
Back in India, Bitcoin fans are no longer as optimistic, especially as the government may soon ban all private digital currencies.
A bill aimed at introducing an official digital currency through the Reserve Bank of India will reportedly be tabled in parliament during the budget session.
The new law will also make certain exceptions to the technology that is vital to cryptocurrency.
Since the Supreme Court lifted the RBI’s 2018 ban on cryptocurrencies in March 2020, investors and the crypto exchanges in India have thrown their weight behind it by pouring money into digital assets.
Indian banks had also started to allow investors / traders to trade on the platforms through their bank accounts, which resulted in a huge increase in digital asset owners.
However, investors are now advising a wait-and-see approach in order to achieve clarity in the regulatory environment.
“We heard that the bill will most likely be passed in parliament soon. This will result in unprecedented sales of bitcoins on exchanges. In India, a trend observed on the stock exchanges is holding bitcoins in wallets for the medium term (3-5 years), similar to any other asset. However, we will most likely see spikes in the trading and sales of cryptocurrencies, ”said Manjunath Shetty, a retail investor and engineer.
The change in regulations in India came at a time when both the global investment majors and corporations were placing their long-term bets on Bitcoin and eventually taking the crown of gold as their preferred capital.
“Indian investors are usually averse to the risky trade, which is cryptocurrency. However, the millennial and educated classes have shown interest in Bitcoin lately. It may be some time before we see huge bitcoin sales on exchanges in India, ”Shetty added.
Why think about a ban?
Governments around the world have been looking for ways to regulate cryptocurrencies, but no major economy has taken the drastic step of blanket banning their possession despite concerns about the misuse of consumer data and its possible impact on the financial system